They deliver desired benefits in Infrastructure for modern brands

2640 Lyndale Ave. South | Minneapolis, Minnesota 55408 | T +1 612 279 1400 | www.zeusjones.com Modern Brand Infrastructure August 2015

An operating model for modern brands. How can a modern brand think about and organize to accomplish all of its necessary operations? What are the different channels, disciplines and programs required to bring a brand to life entirely through its actions? Zeus Jones All rights reserved Thomas Bruce (trbpix) on Flickr licensed under creative commons

How can actions speak louder than words when words are still often required to scale actions? The central issue:   Even today, brands are challenged by scale. Zeus Jones All rights reservedImage via http://bristram.blogspot.com/

Facebook is now a mass reach medium, interaction is minimal at best. Scale via social is next to impossible to generate without paid advertising. Social networks are rapidly devolving into the networks of old Zeus Jones All rights reservedImage via forbes.com

This is why paid media continues to proliferate and advertising remains the business model of the majority of digital startups. Free, mass communication has not materialized as promised. Zeus Jones All rights reserved

Branding evolving from comms to experiences It’s clear that branding has evolved. Messages are being replaced by interactions and campaigns are giving way to comprehensive experiences. Sound an alarm! Advertising, not deals, builds brands. ERIC RYAN Building a brand is about a thousand little new touches. Consistency is only for liars. HOWARD SCHULTZ COMMUNICATIONS Authentic brands don't emerge from marketing cubicles or advertising agencies. They emanate from everything the company does. INTERACTIONS EXPERIENCES ONE-WAY TWO-WAY CONTINUOUS DAVID OGILVY Zeus Jones All rights reserved

Some brands build around existing user behavior For many, the starting point in “brand experience” is understanding a person’s existing behavior and then attempting to fit into their life. However, this is still done primarily through content or fighting for attention CONSUMER Existing Behavior Zeus Jones All rights reserved

Great brands think about desired behavior They understand what people would like to do, even when the people don’t know it themselves. CONSUMER Existing Behavior Desired Behavior Commoditized Functional advantage Zeus Jones All rights reserved

They deliver desired benefits in a differentiated way Modern brands enable new behaviors and create rituals based upon delivering unique experiences. They don’t simply fit into a person’s existing day, they enhance it in proprietary ways. CONSUMER Existing Behavior Desired Behavior Unique Rituals Commoditized Functional advantage Highly differentiated Zeus Jones All rights reserved

Desired benefits delivered in differentiated ways Brands like Starbucks, Uber and Warby Parker have created unique and highly branded rituals around enabling new possibilities and behaviors for their customers Created a coffee culture Defined a new lifestyle Eyewear becomes seasonal Zeus Jones All rights reserved Imageviaslashgear.com Imageviamilanocard.it Imageviahttp://on-select.com/

Infrastructure is key to their unique delivery Their delivery infrastructure is key to modern brands’ experience. None of these companies would be what they are today if they delivered over the same infrastructure as their competition. The third space Your private driver A personal dressing room Zeus Jones All rights reserved Imageviamenemshasolutions.com Imageviaconnexient.com Imageviapingwest.com

Infrastructure owners are incentivized to standardize. They are not trying to help you differentiate. They are trying to sell standardized, repeatable blocks of time and space. Existing brand infrastructure forces standardization Zeus Jones All rights reserved Image via Google

Modern brands are built on top of ideas, platforms and ecosystems that let them communicate, interact, service and sell without having to pay an intermediary. This enables more growth, higher levels of efficiency, and deeper, more permanent relationships with key stakeholders. Modern brands own their infrastructure Zeus Jones All rights reserved Image via wc-news.com

1. Aquire and convert new customers 2. Build markets and communicate with mass audiences 3. Engage with existing customers Infrastructure lets brands fulfill key tasks directly Zeus Jones All rights reserved

They control the experience they deliver They control the way they drive revenue This provides them with huge leverage if and when they deal with a 3rd party channel or paid media Ultimately owned infrastructure lets brands control their destiny Zeus Jones All rights reserved

Elements of modern brand infrastructure

Largely content and/or services ecosystems Drive engagement with brand, additional usage/ consumption of product is desired result. Loyalty Platforms manage relationships with current users. Loyalty Platform Zeus Jones All rights reserved

• Self-sustaining • Based on a value exchange for all parties • Leverages external content creators for efficiency • Assembles brand and partner assets into a cohesive “media” network • Optimized for traffic/SEO and user experience • Can contain both digital and physical assets • Includes a workflow as well as a structural map • Fed by other platforms Ideal Properties of an Loyalty Platform Zeus Jones All rights reserved

We have built a comprehensive loyalty platform for Post It that engages multiple segments of users on an on- going basis It is fueled by a wide range of partners and delivers useful content and services that drive usage and additional purchase. Content extends throughout the owned platforms into partner and retailer platforms. Example: Post It. Zeus Jones All rights reserved

Red Bull have turned content into a revenue stream that rivals (if not beats) the revenue derived from their core product. It doesn’t simply participate in niche sports, it builds and creates them, monetizing the content that is created. Networks like NBC, now pay Red Bull to advertise on their channels. Gold standard:   Red Bull Zeus Jones All rights reserved Image via battlegrounds.redbull.com

Operations as marketing and vice-versa Drive revenue and operational enhancements while also delivering marketing benefits Growth platforms: deliver marketing benefits as an effect of remarkable operationsGrowth Ecosystem(s) Zeus Jones All rights reserved

• Based upon an operational asset • Built on an exchange of value • Usage builds the strength of that asset • An acquisition tool - often generates WOM • Engages collaboration partners • Acts as the primary growth engine for the company • Delivers marketing benefits as a collateral benefit Properties of a Growth Platform Zeus Jones All rights reserved

Mobile interface to existing service makes diagnostic logic transparent and accessible Has rapidly grown to encompass a significant portion of overall visits Created entirely new usage scenarios and a timely acquisition channel Example: virtuwell Zeus Jones All rights reserved

Exposes a key part of operations - fleet scheduling. Drives operational efficiency as it offloads scheduling onto drivers and customers. Delivers marketing benefits through delight and ease of use. Viral/talk value built into the core use case. Drives penetration through mobility of customer base Gold standard: Uber app Zeus Jones All rights reserved Image via bloomberg.com

Operations Assets Marketing benefits Awareness Engagement Advocacy Consideration Preference Choice Customer service Efficiency Competitive advantage New functionality R&D HR Sales Logistics Zeus Jones All rights reserved

Almost exclusively a communications medium Creates enough mass and interest for earned media to drive a significant portion of scale. Key task is creating demand to be fulfilled by other platforms in the brand infrastructure Mass Platforms aggregate audiences for reach Mass Ecosystem Zeus Jones All rights reserved

• Aggregate advocates and mass media to drive huge scale • Operate on the company’s calendar not a media calendar • Work in pulses or bursts that are timed to big news • Often have their own marketing program built around them • Highly connected to other platforms Properties of a Mass Platform Zeus Jones All rights reserved

Through our Better With Pets Summit, we have built a platform that engages the industry, bloggers and press to help share key Purina innovations and values. Example: BWP Zeus Jones All rights reserved

Since pulling out of Macworld in 2008, Apple has tuned its own events and announcements to a fine edge. Teasers, releases, conventions, rituals and importantly, huge amounts of PR, and earned media mean Apple really doesn’t need to advertise. In fact it spends a fraction on paid media compared to rivals like Samsung. Gold standard: Apple Events Zeus Jones All rights reserved

These platforms will vary in size and importance depending upon the nature of the brand and its needs. In some cases, brands may not need all three platforms Different brands will have different infrastructure needs Growth Platform Mass Platform CORE BELIEF & PURPOSE Loyalty Platform Zeus Jones All rights reserved

Campaigns and “big ideas” still have a place, but they operate primarily on the brand’s owned platforms rather than requiring rented media space. (Campaigns can also be used to build infrastructure when it doesn’t exist.) Campaigns still have an important role Zeus Jones All rights reserved Image via Nike

Interactions, experiences, messages and behaviors can be assigned to one or more platforms. Importantly platforms are also not asked to do things that they simply can’t. Promotions: Loyalty and Growth New Products: Mass & Loyalty Etc. Segmented channels simplify planning Growth Platform Mass Platform Loyalty Platform CORE BELIEF & PURPOSE Zeus Jones All rights reserved

Marketing programs that run on infrastructure, also improve the strength, efficiency or effectiveness of that infrastructure. Overall marketing expenditures can decrease over time, or similar sized investments can deliver larger returns. Marketing expenditures have investment components Zeus Jones All rights reserved

Campaigns Infrastructure Long-term thinking Utility as currency Strategic and creative Business/marketing focus Fundamental innovation required Very little competition Unique and valuable Short-term thinking Attention as currency Purely creative Communications focus Tactical innovation required Crowded space for agencies Commoditized Zeus Jones All rights reserved

Brand-centric and consumer-centric development need to be balanced. At the infrastructure level, brand- centricity may lead. At the program level, consumer-centricity will lead Brand-centric development and consumer-centric development Growth Platform Mass Platform CORE BELIEF & PURPOSE Always-On Ecosystem Zeus Jones All rights reserved

Creativity & cultural alignment Functional excellence for infrastructure is not enough. VRBO and airbnb have similar infrastructure. The winners will capture people’s imagination and build upon big ideas in modern culture. Zeus Jones All rights reserved

Modern brands evolving from ideas to networks Rather than becoming less important or abstract, we believe brands are becoming more tangible and more real. Modern brands are networks of assets and relationships that are “hard-coded” into place DAVID OGILVY The intangible sum of a product’s attributes. JOHN GRANT The sum of the great ideas used to build that brand ZEUS JONES BRAND AS IDEAS The sum of the assets and networks that are owned by the brand BRAND AS ACTIONS BRAND AS NETWORKS OWNED BY CONSUMER CO-CREATED OWNED BY COMPANY Zeus Jones All rights reserved

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